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BILL HEMMER, CNN ANCHOR: Live, in Norfolk Virginia, where the U.S. military now is talking about the USS Cole. This, the home port in Norfolk, Virginia, we shall listen now.

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ADM. JOHN FOLEY, U.S. NAVY ATLANTIC FLEET: We have only good thoughts and prayers in mind for the folks who are here behind: the spouses, the husbands and wives, sons and daughters and moms and dads of those people who are in Cole, right now, over there in Aden.

Briefly, we have provided for the dependents, the families a place to gather here on the Naval Air Station, where we can provide for them in a single location legal help, counseling from the Greek counseling team from the Naval hospital, chaplains assistance. There will be people from the bureau of Naval personnel to advise them on their entitlements rights and responsibilities now. Folks from the Navy family counseling center here in Norfolk will be present. People from Navy relief and, of course, we'll provide child care and galley food service support for those people while they are there. And this will be on a 24-by-7 basis so that anytime anyone has a problem from the Cole family, they can go to a central location and talk to whoever they need to talk to for whatever kind of problem it is they have at the time.

The circumstances of the incident have been described in some detail in the international news. I can't give you any more information than you already have about the ship and the damage. There was an explosion, caused externally to the ship. There are more than 30 injured, some seriously. There has been severe damage to the ship structurally, as reported in the news. There are four dead that we know of right now and some missing sailors from Cole.

As soon as we have the names of the dead and injured and, of course, the names of those who are alive and well, and we get that information to their next of kin, then that information will be made available to the press. That's the information I have right now. And if anyone has any questions, I can briefly take them because I am on my way right now to talk to the families that have already assembled from this local area.

QUESTION: I am unclear, was it terrorism or was it not terrorism? FOLEY: I don't know whether it was terrorism or not. It was an act of, certainly, a severe belligerence, but we don't know the source, nor can I comment any further on that.

QUESTION: But it wasn't just, like, some U.S. Navy mishap. It did involve a third party.

FOLEY: To the best of my knowledge, to the best of our knowledge, this was an external source that caused this explosion.

QUESTION: Everybody is on a high state of alert over there. And this...

HEMMER: Admiral Jay Foley there, speaking in Norfolk, Virginia. which is the home port, once again, of the USS Cole. A lot of questions still surrounding what indeed happened about 5:15 a.m. Eastern time, earlier this morning. As we continue to monitor things out of Norfolk, watching the Pentagon closely too, now Daryn.

DARYN KAGAN, CNN ANCHOR: Yes, we are covering this from the home base of the USS Cole all the way up to the Pentagon, where we find our military affairs correspondent Jamie Mcintyre.

Jamie, what new do you have on this?

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Daryn, you heard the admiral there waffling a little bit on the key question of: Was this a terrorist attack or could the explosion on the small boat that was near the Aegis cruiser, could that have been an accident?

And though the Pentagon and Washington is officially waffling, unofficially they are no longer waffling. A senior Pentagon official telling CNN that it is, in fact, believed this was a terrorist attack. The quote was, we have every reason to suspect it was a terrorist attack and no reason to suspect that it was not.

It was an explosion on a small boat that was apparently helping the USS Cole with it's mooring lines, but the nature of the explosion, the force of the blast, indicates that there were explosives on that boat, not some sort of routine mishap. The damage to the ship, which is a specially reinforced hull was a hole that was 20 by 40 feet and caused severe flooding in the ship. The loss of life of at least four U.S. Navy sailors, 35 more injured, 10 still missing, according to the latest figures from the U.S. Navy.

But again, a senior Pentagon official telling CNN that this almost certainly was a terrorist attack, although while they said there are no absolutes in this kind of thing, all of the evidence -- and they can't share all of the evidence with us at this time -- but all of the evidence points to a terrorist attack. None of it points to any sort of accidental mishap -- Daryn.

KAGAN: Jamie McIntyre at the Pentagon, thank you very much.

HEMMER: We should let everybody know that we are getting some calls here in the newsroom, questions from U.S. families about sailors on board that ship. Again, we have been putting the number up on the screen, 1-800-368-3202 for questions about sailors on board the USS COLE.

Let's talk more about it. And, once again, let's bring in Alec Fraser. He is a retired U.S. Navy captain, currently president of Turner properties, joins us live, here in Atlanta.

Based on what we are hearing, not only out of Norfolk but also Jamie McIntyre's report, what can you add to this current conversation?

CAPT. ALEC FRASER, U.S. NAVY (RET): I think it's obvious from the report that there is a gash in the side of the ship of 20 by 40 feet that that would not be caused by a an explosion of gas tanks on a tug boat or a tender that was next to the ship, that there would have to be additional explosives or something else that caused an injury to the ship that large.

HEMMER: Knowing that, on the port side, what can you tell us about the Aegis destroyer, are there missiles on that side? Is there fuel tanks stored on that side? How does it operate within the ship itself?

FRASER: If the explosion and the gash is on the last third of the ship, we are fortunate in that in that area of the ship are engineering compartments. The compartments where the shafts are going through the skin of the ship out to propellers where the rudders are being controlled. It is not an area where there are magazines or any type of danger from explosives.

KAGAN: This ship, the USS Cole, was on a routine refueling stop. It's mission, and they said that this other smaller boat was helping it out. Explain to us how that works and whether this is where the explosives came from or not, what the smaller boat would have been doing.

FRASER: Small boats are used to be able to take mooring lines from the ship to the pier when a ship is mooring. In close harbors, like, probably, in Yemen, it's very important that those boats go up next to the ship to be able to get it next to pier in a safe manner.

HEMMER: In a short time here, sir, we are going to show our viewers some videotape that's just coming in from Yemen TV and as soon as we get it again, we'll put it up on the screen for you, but in the meantime, let's continue our conversation. When a ship goes into port unannounced like this, how tight are the security measures taken, especially in parts of the world where U.S. interests are vulnerable?

FRASER: The security on the ship will be a normal import security, heightened with additional watches topside. It would not involve having the gunsman, other than people, security with rifles on the front part of the ship and the back part of the ship. To be able to identify -- and numerous small boats are going back and forth in harbor, as some as hostile or some as just normal tenders would be very difficult. KAGAN: We need you to stand by just a second.

We are hearing that our Jamie McIntyre, as we work this story from one end to the next, Jamie back to the Pentagon to you with even more information about the USS Cole.

MCINTYRE: And now more information now about why the United States does, in fact, believe that this was a terrorist attack. In fact, it was apparently a suicide attack.

Here are the details that we pieced together from sources here at the Pentagon. What apparently happened, this was about mid-day in Yemen, the USS Cole is in port for a refueling stop. One of the small boats, a harbor tender, such as the ones you were describing, came alongside the USS Cole to help with its mooring lines. It took one line from the U.S. destroyer and attached it, apparently, to a pier. It then pulled alongside and took a second line.

At that point, sources tell us, there were two people on this harbor tender boat. They both, apparently, stood at attention just before the boat exploded, blasting that big in the side of the USS Cole. So, it gave every earmark there that this was an intentional act that the two people on board the smaller tender craft knew that it was, in fact, loaded with explosives, that they put it in a position where they thought it would do the damage it would and then took their own lives by simply standing on the ship at attention just before it blew up.

KAGAN: So, Jamie, it sounds like it was a suicide mission.

MCINTYRE: Yes, it does. The indications we are getting now as the reports are filtering back and we are able to talk to some sources here at the Pentagon, is that, in fact, it was a suicide mission. It was an intentional attack and that there would have been, that it was done in a very sophisticated way, because they would have had to have known that this ship was coming in just for a very brief time at this port. The USS Cole was not making a port visit. It was only stopping to refuel for four to six hours. It was scheduled to go back to the Persian Gulf, where this ship was involved in the enforcement of oil embargo against Iraq in the Persian Gulf.

So, again, more evidence why the United States is convinced that this, in fact, was a terrorist attack, in fact, a suicide attack on the USS Cole.

HEMMER: Yes, Daryn, just want to show our viewers the videotape we're getting in from television in Yemen -- we're going to put it up on the screen. We have not seen this videotape yet, so you're going to be witnessing it the same time we are. Apparently, these are U.S. sailors who have been injured on board the USS Cole. The word through Jamie and others was that several sailors had been severely burned. The numbers continue to change -- well over 30 people have been injured, several of them with severe burns and again, four U.S. soldiers have been killed as a result of this explosion. In addition to that, also getting word that a dozen U.S. soldiers are still listed at missing.

Back to Washington, Frank Sesno once again -- Frank.

FRANK SESNO, CNN ANCHOR: Bill, thanks a lot.

Still with us, former national security adviser Brent Scowcroft.

General Scowcroft, listening to Jamie McIntyre telling us some of the detail surrounding the USS Cole, seeing these pictures and thinking of this incident: What does this suggest in term of U.S. acts abroad?

What is your reaction to what is taking place right now?

BRENT SCOWCROFT, FORMER NATIONAL SECURITY ADVISER: I think what it suggests is that the emotion, not only in Palestine, but the emotions throughout the Middle East is rising and that the United States, widely perceived as being pro-Israel, is likely to be a target; and, certainly, in this case, apparently, was a target.

SESNO: So, granted that it is early, we have had no claims of responsibility or anything like that. But you are making a connection, even at this time, to what is happening in the Middle East?

SCOWCROFT: To what is happening, yes.

Now, is it tied to events of the last 24 hours? Perhaps not? I mean, this tender could have been prepared for any ship that came in for some time. But the connection between, in general, of what is going on in the peace process now, to this attack seems fairly clear to me.

SESNO: General, what does this mean for U.S. interests overseas, especially in this very volatile region, and what can the United States government reasonably be expected to do and expect from host countries?

SCOWCROFT: Well, it seems to me that what it means is that our assets are at increased risk. What it means in a policy sense is we have to do what's right. We have to try to punish those responsible, if we can find out who they are; and, also, it puts a premium on de- escalating this confrontation.

SESNO: Doesn't punishment suggest an escalation, however?

SCOWCROFT: Well, I'm assuming the perpetrators, whoever they are, are not out of the West Bank. It's likely that they're somebody else, whether it's from Afghanistan from Syria, from somewhere. SESNO: Take us back into the White House for just a moment.

If you were there and under a circumstance like this, what are the kinds of communications that are going forth? What are kinds of orders that are issued in terms of alert status, and that kind of thing, to these U.S. assets overseas, to American citizens who may be overseas?

SCOWCROFT: Well, I would say that there was an order going out from the situation room to the Pentagon to the state department, to alert all of our stations in any area where they might be subject to this kind of inflammatory response, to increase their alert status.

SESNO: General, over recent weeks and months, the United States has become more deeply involved as an actual mediator in the Middle East peace process.

Has that been a dangerous thing, because you become associated with one side or the other?

SCOWCROFT: Well, I think -- the one thing that comes to my mind as being a particular problem is that, after the Camp David summit broke up, President Clinton, in effect, blamed Arafat for the breakup. And Arafat, at the outset had said he did not want to come to the summit. He was not prepared.

He went to the summit anyway at the urging of the United States, then we blamed him for the breakup; and I suspect that that helps identify the United States as an enemy, if you will, of the Palestinians.

SESNO: I'd like to bring in my colleague, Bill Hemmer, now in Atlanta with a question for you.

Go ahead, Bill.

HEMMER: Yes, Frank, thank you.

Mr. Scowcroft, if you can hear me OK, why is it and how is it, based on the reports we're getting from the Pentagon that a U.S. destroyer, part of the elite in the U.S. Navy can go into an international port knowing that this country has a history of terrorism and other national security concerns -- in fact, it was just recently taken off the national security list.

How could it go into this port city without proper security in the port to help that ship moor?

SCOWCROFT: Well, I'm an Air Force officer, not a naval officer.

But, first of all, it's my understanding that this was not a notified visit. That it was a drop-by in a sense, because they needed fuel. And, therefore, if that's true, then this had to be a carefully, premeditated effort.

Now, anytime a ship goes in, they have to have tenders and, you know, it's not possible for them to physically inspect each and every tender that works with them. So it's one of those things that, probably, they may have been a little lax, but it's probably very difficult to ensure complete security.

SESNO: And when military targets such as this are, in fact, targeted, does that put a special burden on the United States and on the military to respond or to look after other assets -- it's not a sitting duck like in an embassy some place.

SCOWCROFT: Yes, I think it does. And I think anytime there is a deliberate, premeditation to attack U.S. assets like our military, that it's incumbent upon us to respond.